ASX Announcement - National Comfortable With Its Accounting Treatment of European Pension Funds - 18 December 2003

The National Australia Bank is comfortable with its accounting treatment of defined benefit pension funds in Europe, Chief Financial Officer, Mr Richard McKinnon, said.

Mr McKinnon was responding to an article on page one of the Australian Financial Review (18 December 2003) that the National, and other Australian companies, may be required by the Australian Securities and Investments Commission to recognize in its accounts shortfalls in staff superannuation funds.

"There are no shortfalls in our Australian or New Zealand defined contribution staff superannuation schemes and there has been clear and comprehensive disclosure about the current accounting deficits in our European defined benefit pension funds," Mr McKinnon said. "All of our disclosures are in line with current accounting standards."

"The National fully disclosed higher European pension costs in a statement to the Australian Securities Exchange on 7 October 2003, and Note 48 of the financial statements in our 2003 annual report fully outlines our superannuation commitments."

Mr McKinnon said the National has no obligation to make payments in respect of any deficits over and above its annual contribution to these plans unless required by the applicable statutory minimum funding requirements.

"An interim actuarial review at 30 June 2003 confirmed that our European staff pension funds exceed the minimum funding requirements set by legislation and are actually in surplus on a best estimates basis," Mr McKinnon said.

"Following the review, the National's defined benefit pension funds in Europe have been closed to new members and defined contribution schemes will be opened for new members from 1 January 2004."

For further information, please contact:

Brandon Phillips
Group Corporate Affairs
Melbourne
Tel:  03 8641 3857
Mob: 0419 369 058